Article ID Journal Published Year Pages File Type
10480550 Pacific-Basin Finance Journal 2005 17 Pages PDF
Abstract
This study links together theoretical models of strategic alliances with an empirical examination of stock returns on the announcement of strategic alliances. Using a sample of 123 strategic alliance announcements, the results find strong support for the hypothesis that strategic alliance announcements generate significant positive abnormal returns on the announcement day. Although strategic alliances are more prevalent in the higher technology industries, the source of the abnormal stock returns is a subsample of firms with the lowest market to book values. This is found to be supportive of the hypothesis that the announcement of a strategic alliance is additional information for firms with low growth. There is no empirical support for the knowledge, flexibility and the hubris hypotheses.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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